Federal Reserve System
Fed greenlights Wells Fargo revamp, lifts growth limits
Bank’s 2015 plan contained “deficiencies” that have now been corrected, US agencies say, although a further hurdle is coming this year
Long-run rates have been lower – Chicago Fed economists
Economists note the long run downward trend among G7 countries has reversed in the past, suggesting it could do so again
Fed fines Deutsche Bank on Volcker rule breach
Bank hit with fines for “unsound” practices in forex markets and violation of Volcker rule; Fed’s Powell admits the rule may need simplifying
Volcker fights back as prop-trading ban comes under attack
Former Fed chair tells Risk.net that calls for total overhaul of eponymous rule are misplaced
Thinking on global capital flows is muddled – BIS’s Shin
BIS head of research says policies to guard against excess global liquidity should look at underlying causes, not symptoms such as capital flows; Fed’s Fischer acknowledges policy spillovers
Fed paper seeks better forecasts from information inefficiencies
Paper finds it is difficult to build a better forecast on the basis of deviations from rationality in surveys, implying such inefficiencies are not “economically meaningful”
No ‘taper tantrum’ this time around – Fischer
Fed vice-chair says US central bank has learned from mistakes made in 2013; markets unlikely to face same disruptions as Fed unwinds balance sheet, says Fischer
Little EME volatility spillover from Fed/ECB balance sheets
Central bank policies had little impact on volatility in EMEs’ real markets – researchers
Central banks could intervene on repo market function – BIS study
Markets still in a “state of transition” but some central banks might want to take action to mitigate adverse effects, CGFS report says
‘Our independence is under threat’ – Yellen
Fed chair cites two legislative bills that could significantly harm the central bank’s ability to make independent monetary policy decisions; US economy is being allowed to “coast”
Congress urged to curb Fed’s regulatory powers
House hearing revives the debate on consolidating US regulatory agencies
FOMC mulls ‘predictable’ balance sheet wind-down
One FOMC member says a “minimum pace” should be set for the reduction in mortgage-backed securities; committee will inform the public about its future plans for the balance sheet when the time comes
New paper examines central bank digital currency models
Bank of Canada experiment proves distributed ledger networks can be used to settle payments; paper examines the difference between retail and wholesale models
Tarullo admits Volcker rule may be ‘too complicated’
Outgoing Fed governor says Volcker rule probably needs adjustment, though he warns against any measures that would weaken the capital regime
Fed’s Jeffrey Lacker quits over information leak
Richmond Fed president resigns after admitting he leaked information from the September 2012 FOMC meeting; Lacker failed to report indiscretion on three occasions
Fed paper searches for optimal bank capital
Study weighs higher cost of equity against the reduction in costly financial crises implied by higher capital, estimating an optimal figure
RBI’s Patel gets pay rise but remains cheap by G20 standards
RBI governor sees his pay increase somewhat relative to his predecessor, but other G20 governors and even other RBI staff earn substantially more
Fed’s Dudley discusses unwinding of balance sheet
Should reinvestment end “abruptly”, financial conditions would tighten, New York Fed president said; tapering “gradually and predictably” is the way to go, he adds
Fed presidents lay ground for extra rate hike
Evans, Rosengren and Williams all signal the possibility of a fourth rate hike in 2017 if economy runs hot
Fed income drops in 2016
Central bank remits less to US Treasury as interest income declines and operating costs rise; passage of "Fast Act" changes remittance process
Extended monetary easing in US has larger impact abroad – paper
IMF paper examines the impact of periods of prolonged monetary easing on risk-taking behaviour; leverage ratio and other measures of vulnerability increase
Time to shrink Fed’s $4.5 trillion balance sheet, say presidents
Cleveland Fed president is “comfortable” changing reinvestment programme this year; balance sheet plan should be published as soon as possible, says Kashkari
Kashkari explains his sole FOMC dissent
Minneapolis chief reminds his colleagues the Fed treats 2% inflation as a target, not a ceiling; urges FOMC to publish plan for shrinking balance sheet
Fed delivers 25bp hike
Fed makes rate hike that many FOMC members have been hinting at for weeks; committee gives bullish signals on the outlook